DUBAI, Feb 26 (Reuters) - A leap by shares in GFH Financial enlivened an otherwise dull Dubai stock market on Monday, while bank stocks dragged on Saudi Arabia’s index for a second straight day because of concern about their Islamic tax liabilities.

The Dubai index was flat but GFH climbed 6.6 percent and accounted for over a third of market volume after saying Jassim Alseddiqi, chief executive of Abu Dhabi Financial Group (ADFG), had been elected chairman of its board.

The company did not explain the development but it could point to closer cooperation between GFH and ADFG, which owns nearly half of Shuaa Capital, whose shares gained 1.8 percent. GFH and Shuaa held merger discussions last year but the talks were called off in June.

Alseddiqi told Al Arabiya television on Monday that after last year’s talks failed between GFH and Shuaa to produce a result, “Currently we at GFH are looking at other acquisitions.”

Reuters reported on Thursday about rising Islamic tax liabilities at Saudi banks. In recent weeks, several banks have disclosed the government is seeking additional zakat payments from them going back as far as 2002. Analysts expect more banks to disclose zakat demands in coming weeks.

In addition Qatar National Bank, the largest lender, slid 3.1 percent. The stock closed below its 100-day average, which had been acting as support, for the first time since mid-December - a negative technical signal.

In Egypt, Palm Hills Development gained 3.2 percent after reporting that fourth-quarter consolidated net profit after tax and minority interests jumped 44 percent to 338.6 million Egyptian pounds ($19.2 million). It said it was targeting net profit of over 800 million pounds this year.